Cost-benefit Analysis of Remediation

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Cost-benefit Analysis of Remediation

  1. 1. Cost-benefit Analysis of Remediation Livelihood and Income from the Environment Program Lead Pollution Clean-up in Qalyoubia July 17, 2007 This publication was produced for review by the United States Agency for International Development. It was prepared by Millennium Science and Engineering Inc., in cooperation with Chemonics International.
  2. 2. Cost-benefit Analysis of Remediation Livelihood and Income from the Environment Program Lead Pollution Clean-up in Qalyoubia DISCLAIMER The author’s views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government.
  3. 3. LIFE Lead Pollution Clean-Up in Qalyoubia Millennium Science & Engineering, Inc. CONTENTS INTRODUCTION 1 DESCRIPTION OF STUDY AREA 1 ECONOMIC VALUATION OF HEALTH BENEFITS GAINED FROM REMEDIATION 3 Impacts of Lead on the Neurological System of Children 3 Economic Model 4 Dose – Response Function between the BPb Levels in Children and Decrements in IQ 9 Loses in Earnings Per Capita at Each BPb Level (X) 13 Economic Burden of Cancer in Shoubra El Kheima Area 14 CONCLUSIONS 24 BIBLIOGRAPHY 25 FIGURES Figure 1: Study Area 2 Figure 2: Casual Model of Lead Exposure and Economic Productivity 3 Figure 3: IEUBK Model Run for Pre-remediation Soil Lead Levels 7 Figure 4: IEUBK Model Run for Safe Soil Lead Levels 8 Figure 5: Linear vs. Log Linear Model of BPb and IQ Levels 10 Figure 6: Mortality and Incidence Rates in Egypt (WHO)-2002 23 TABLES Table 1: Comparing BPb Levels of Children in the Study Area Pre- and Post Remediation 6 Table 2: Outcome of the IEUBK Model 8 Table 3: Comparison of Mean BPb Levels in Children – EEPP Epidemiological Study and IEUBK Model 9 Table 4: Lead Coefficients for IQ Function 11 Table 5: PV Losses in Lifetime Earnings Per Capita at each BPb Level 13 Table 6: PV of Total Losses in Lifetime Earnings at Each BPB 14 Table 7: Carcinogenic Hazard in the Study Area 16 Table 8: Estimated Cases of Cancer Corresponding to Pre-remediation Levels 16 Table 9: Age Distribution of Cancer Incidence in Egypt for Children and Its Application to the Shoubra El Kheima Area 17 Table 10: Age Distribution of Cancer Incidence in Egypt for Adults and Its Application to the Shoubra El Kheima Area 18 Table 11: Regression-Adjusted Mean Total Direct Medical Costs in the Study Population 19 Table 12: Direct Cost of Treatment for Cancer Patients in Egypt 21 Cost-benefit Analysis i
  4. 4. LIFE Lead Pollution Clean-Up in Qalyoubia Millennium Science & Engineering, Inc. INTRODUCTION Lead contamination from secondary lead smelters in Shoubra El Kheima, Qalyoubia poses serious health threats to the people living and working near the former smelters. To address this problem, the United States Agency for International Development (USAID) and the Government of Egypt (GOE) designed a lead clean-up component under the Livelihood and Income from the Environment Program (LIFE). The clean-up project is called LIFE-Lead Pollution Clean-up in Qalyoubia (LIFE-Lead). The overall goal of the project is to empower local residents in the polluted communities to improve their living conditions. LIFE-Lead is being implemented by Millennium Science & Engineering, Inc. in association with Chemonics International (MSE/Chemonics). The project has remediated seven secondary lead smelters, two schools, and a medical center. The project was extended from March 31, 2007 through December 31, 2007 to allow for the site characterization and possible remediation of 20 flour mills, the remediation of a copper smelter, and the remediation oversight of a battery assembly facility that will be remediated by the owner. In addition to site remediation, the project includes activities in community involvement and public participation, communication, capacity building, and policy/legal support. This document presents a remediation cost-benefit analysis. The remediation activities included in this analysis includes the initial activities of the project that occurred prior to the end of March 2006 (i.e., seven secondary lead smelters, two schools, and a medical center) and does not cover the additional activities within the extension scope through the end of December 2007. The objective of the cost-benefit analysis is to identify and quantify the economic benefits resulting from the Life-Lead remediation efforts, weighted against the costs of remediation in a specified study area. The benefits side places an economic value on the health benefits gained-expressed in terms of cost savings, as a result of reducing lead contamination to the safe levels. There are a number of health risks associated with exposure to elevated levels of lead. However, this analysis focuses only on two primary avoided health risks resulting from the remediation efforts; impact on a child’s neurological system and increases in carcinogenic risk in the study area. Models to quantify both health risks are in place and will be presented below in the relevant sections of the study. Other health risks associated with exposure to lead include hypertension costs in adults, and cardiovascular mortality. The reason for their exclusion from the benefit analysis is the limitation on means of assigning a monetary value to them. On the cost side, it was recognized that to achieve safe levels of lead concentration in soil, remediation activities in the residential areas around the smelters will be imperative. Costs of these interventions were recognized and added to the initial investment costs. DESCRIPTION OF THE STUDY AREA Previous characterization activities in Shoubra El Kheima, Qalyoubia have focused on an area within a one-kilometer radius of the Awadallah Secondary Lead Smelter No.1. For purposes of this analysis and for the sake of consistency with other studies undertaken in the project, the Study Area is defined as the area within a one-kilometer radius circle centered on the former Awadallah Secondary Lead Smelter No. 1 exhaust stack. The Study Area and the location of the schools, the medical center, and the seven smelters are indicated on Figure 1 below. Cost-benefit Analysis 1
  5. 5. LIFE Lead Pollution Clean-Up in Qalyoubia Millennium Science & Engineering, Inc. Figure 1: Study Area ECONOMIC VALUATION OF HEALTH BENEFITS GAINED FROM REMEDIATION Impacts of Lead on the Neurological System of Children A significant body of scientific literature proves that lead is a neurotoxin. According to the Agency for Toxic Substances and Disease Registry (ATSDR), the nervous system is the “most sensitive target” to lead exposure. The impacts of lead on the nervous system have been historically recognized since the late 18th century. Occupational studies document the symptoms related to excessive worker exposure to lead as loss of appetite; forgetfulness; headaches; malaise; and a defect in hand-eye coordination. Blood Lead (BPb) levels associated to these adverse health impacts ranged between 40 and 120 micro grams per deciliter (ug/dl). In severe cases of exposure to lead, lead poisoning resulted in encephalopathy with symptoms such as seizures and convulsions possibly followed by coma or even death (WHO, 2003). Prior to the 1970s, a level of lead exposure considered dangerous by the Center for Disease Control and Prevention (CDC) was equivalent to a blood lead (BPb) level higher than 60 ug/dl,- a level which would mostly result in lead toxicity. In 1971, CDC dropped this level from 60 ug/dl to 40 ug/dl, then further to 30 ug/dl in 1978. In 1985, the CDC dropped the acceptable level to 25 ug/dl and then in 1991 both the World Health Organization (WHO) and the CDC established a level of 10 ug/dl as an acceptable BPb level above which human health would be endangered. In spite of this significant decrease in the acceptable BPb levels from the early 1970s, there is currently no evidence of a BPb level below which there is no impact on the neurological system. Cost-benefit Analysis 2
  6. 6. LIFE Lead Pollution Clean-Up in Qalyoubia Millennium Science & Engineering, Inc. A number of studies undertaken in the 1990s actually provide evidence of damage to the human nervous system at BPb levels less than 10 ug/dl. In light of this, this study will attempt to quantify the health risks associated with BPb lower than 10 ug/dl. Lead impacts the peripheral and central nervous systems. The impacts are greatly magnified in children since their brain barrier and nervous systems are still in a developing phase and their blood brain barrier is incomplete. This fact is further enhanced with behavioral patterns of children such as swallowing and inhaling lead in dirt during play time and is compounded by a higher lead absorption rate in children. One of the most recognized, documented, and measured impacts of lead on children up to seven years of age, is its “subtle impairment of neurodevelopment” (ATSDR, 1999). This results in lower cognitive and behavioral abilities, in addition to documented hearing impairment and damaged peripheral nerve function. The best established measure of these neurological deficits is lower cognitive performance on standardized tests of general intellectual ability-Intelligence Quotient (IQ). Deficit in IQ has been generally associated with lower performance in school and to lower productivity in the labor market. Figure 2 illustrates the relationship between lead exposure and economic productivity (Gross et al, 2002). Figure 2: Casual Model of Lead Exposure and Economic Productivity Lead in the Environment Lead in Children (BPb) Neurodevelopment (IQ score) Individual Productivity (% change in earnings) Expected Earnings (Present Value) Economic Model The economic model used to estimate the health benefits accrued from avoided adverse lead impacts on a child’s neurological system largely follows the underlying logic in Figure 2 and consists of the following steps. Cost-benefit Analysis 3
  7. 7. LIFE Lead Pollution Clean-Up in Qalyoubia Millennium Science & Engineering, Inc. Establishing the BPb Levels of Children in the Study Area-- A first and essential step in this economic model is to establish the BPb level of children in the study area which corresponds to the levels of lead in the soil. In order to estimate this, there were initially two alternative methodologies to follow, each draws on different tools and each has its limitations. The first methodology was to adopt the results of the Egyptian Environmental Policy Program (EEPP) Epidemiological Study - 2004, which documents real BPb levels of residents within the study area, corresponding to the levels of lead contamination in soil. The original objective and design of the EEPP Study was to establish a baseline of BPb in a sample of the population which included adult males and females, and children), in five different operational units set up by the study and then to relate it to the levels of lead contamination in soil. In light of this, it is unclear whether the sample of the children in the epidemiological study and their geographical distribution would have been affected if the objective of the study was merely to address the impact of soil lead contamination on the neurological system of children, and consequently whether the documented mean BPb level would have been altered. Nevertheless, the results of the study certainly provide insight on the BPb level of children in the study area. The other alternative methodology was to use the Integrated Exposure Uptake Biokinetic Model (IEUBK) for lead - a model used as a risk assessment tool by the USEPA. The model draws on four interrelated modules (i.e., exposure, uptake, biokinetic,and probability distribution), to estimate the BPb level in children related to lead exposure (USEPA, 2002a). The model is fed with a mean of lead contamination levels in soil obtained from real soil samples acquired from the study area. Apart from this, the model requires data regarding exposure, and uptake of lead by children. This data is based on assumptions in the model rather than real collected data and hence results can also be affected if any of the assumptions are not typical of the study area. In view of this, it was decided not to favor one methodology over the other and instead to use both methodologies to present a range of results of the impact of lead on the children neurological system in the study area. In the following section, the two methodologies will be explained in detail. Methodology 1: Adopt Results of the EEPP Epidemiological Study – 2004-- In 2004, EEPP undertook a baseline human health risk assessment for receptors within the one-kilometer radius of the Awadallah Secondary Lead Smelter No. 1 to assess the health impacts of lead contamination in soil. The results of the assessment indicated that the Awadallah Secondary Lead Smelter No. 1 presented a multitude of health hazards to workers, nearby residents, and the environment (EEPP, 2003). In an effort to quantify these impacts, EEPP in collaboration with the Ministry of Health and Population completed an Epidemiological Study documenting the BPb levels of residents within the same study area – a one-kilometer radius of the Awadallah Secondary Lead Smelter No. 1 exhaust stack. The area was divided into five operational units using a spatial method where each group of recruited participants in close geographic area were included in an OU regardless of the lead concentration of soil and dust. Cost-benefit Analysis 4
  8. 8. LIFE Lead Pollution Clean-Up in Qalyoubia Millennium Science & Engineering, Inc. Blood samples were collected from 284 subjects in 86 homes. The results of the study showed that 66.7 percent of men, 63.4 of women, and 48.9 percent of children less than 7 years of age who live near the smelters have blood lead levels higher than 10 μg/dL. The maximum measured BPb level was 41 μg/dL and the mean was 13.7 μg/dL in the study area (EEPP, 2004). The Epidemiological Study concluded that there is substantial risk to those living near lead smelters in Shoubra El Kheima and that remediation activities should commence immediately to protect residents from the hazards of lead in the environment. This cost benefit analysis aims at capturing the impacts of lead on the neurological system of children, hence the results of the epidemiological study are only relevant with regards to the documented BPb levels of children up to 7 years of age. One hundred thirty-three (133) children were recruited for the Epidemiological Study with a mean age of 3.9 years. The mean documented BPb level of children was recorded at 12.1 μg/dL, and accordingly will be used as our first estimate in this study. In order to compare this figure with a BPb level of children at safe levels, we used the recorded BPb level of children in the Dokki area of greater Cairo which was used as a control group in the Epidemiological Study. The documented BPb was 2 μg/dL (EEPP, 2004). The recorded mean BPb level was applied to the number of children under 7 years of age in the study which is estimated at 17,020 children (Human Development Report, 2003). It is worth mentioning that a post-remediation BPb level survey was completed in 2007, to measure the impact of the Life-Lead project remediation activities on the BPb level of the population. Results are presented in Table 1 by Operational Unit. However, these results were not used in our analysis because they only capture the current improvements in the BPb level rather than the expected long term improvement. It is expected that the BPb level will further decrease over time with the elimination of the sources of pollution and hence using the post remediation BPb level results will undermine the benefits accrued by the Life-Lead project in the future. Nevertheless, the post–remediation BPb level survey serves an important indicator in establishing the decline of the BPb level in the population of the study area between 2004 and 2007. This result can largely be attributed to the remediation activities of the Life-Lead project given the clean-up of the heavily contaminated secondary lead smelter sites which were a source of lead contaminated fugitive dust and soil in the area. With regards to children, the survey documented that there was approximately a one third (32%) reduction in the BPb level in 2007 compared to the 2004 in the study area (Life-Lead Project, 2007). Cost-benefit Analysis 5
  9. 9. LIFE Lead Pollution Clean-Up in Qalyoubia Millennium Science & Engineering, Inc. Table 1: Comparing BPb Levels of Children in the Study Area Pre- and Post Remediation BPb (µg/dL) 2004 Study BPb (µg/dL) 2007 Study Operational Unit Minimum Maximum Mean Minimum Maximum Mean OU 1 1.7 35.0 11.8 5.2 30.3 11.5 OU 2 3.9 35.2 17.4 1.0 19.7 8.4 OU 3 2.9 25.7 11.0 1.9 13.0 6.3 OU 4 2.4 20.7 10.8 2.0 11.9 6.1 OU 5 2.1 27.1 10.3 1.2 12.9 4.7 Overall 1.7 35.2 12.1 1.0 30.3 7.3 Methodology 2: Integrated Exposure Uptake Biokinetic Model (IEUBK Model)-- The Integrated Exposure Uptake Biokinetic Model (IEUBK) for lead - a model used as a risk assessment tool by the USEPA, was used to calculate the BPb levels of the children in the Study Area. The model is fed with data, to first estimate a geometrical mean of the BPb level in the children’s population and secondly to estimate a probability that the BPb level of this population will exceed the acceptable value of 10 ug/dl. The IEUBK was applied to the population of children in the study area under 7 years of age which is estimated to be 17,020 children (Human Development Report, 2003). Two runs of the model were undertaken, one to estimate the geometrical mean of the expected BPb level in children and the percentage affected given the pre-remediation lead levels in the soil. While the other run estimated the same parameters corresponding to a reduction in lead to the safe levels. Safe levels were estimated at 400 ug/Pb/g, which is the acceptable clean-up level for soil in the residential areas set by the USEPA. The following two figures illustrate the results of the two runs, and they are summarized in Table 2. They show that pre-remediation levels of lead corresponded to a mean of 24 ug/dl in children, while post remediation levels of lead resulted to a drop in the geometrical mean of BPb levels to 4.74 ug/dl. Cost-benefit Analysis 6
  10. 10. LIFE Lead Pollution Clean-Up in Qalyoubia Millennium Science & Engineering, Inc. Figure 3: IEUBK Model Run for Pre-remediation Soil Lead Levels Cost-benefit Analysis 7
  11. 11. LIFE Lead Pollution Clean-Up in Qalyoubia Millennium Science & Engineering, Inc. Figure 4: IEUBK Model Run for Safe Soil Lead Levels Table 2: Outcome of the IEUBK Model Soil Lead Concentration Geometrical Mean of BPb Levels in Children 4,138 ug/Pb/g (Average Contamination 24.0 ug/dl Level) 400 ug/Pb/g (Safe Level ) 4.7 ug/dl Comparing the BPb Levels of Children using Methodologies 1 and 2-- Table 3 provides a summary of the mean BPb levels in children pre- and post-remediation using the EEPP epidemiological Study - 2004 (Methodology 1) and the IEUBK Model (Methodology 2). Cost-benefit Analysis 8
  12. 12. LIFE Lead Pollution Clean-Up in Qalyoubia Millennium Science & Engineering, Inc. Table 3: Comparison of Mean BPb Levels in Children EEPP Epidemiological Study and IEUBK Model Mean of BPb Levels in EEPP Epidemiological IEUBK Model Children Study - 2004 Pre-Remediation Level 12.1 ug/dl 24.0 ug/dl Post–Remediation-Safe Level 2 ug/ dl 4.7 ug/dl The difference between the pre- and post-remediation BPb levels under each methodology in Table 3 provides a range of the magnitude of avoided health risks resulting from the remediation efforts conducted by LIFE-Lead. Dose – Response Function between the BPb Level in Children and Decrements in IQ The impact of lead on IQ is most commonly measured by establishing a dose-response function between the BPb level and the corresponding decrease in IQ points. Although this relationship has been extensively studied, a universal dose-response function is not yet established. There are two main forms of the dose-response function; one represents a linear relationship, whereby an increase in the BPb level leads to an equal increase in IQ points lost and the other is a non- linear model indicating that the rate of increase in IQ points lost is variable at each BPb level depending on a dose-response curve (Gross et al, 2002). The dose-response function for BPb levels and IQ levels are well reflected in two inclusive meta-analysis epidemiological studies, one conducted by Schwartz and the other by Pocock et al, in1994. A meta analysis study is a study which conglomerates and examines the results of a number of studies to give way for a more accurate statistical analysis given the bigger sample size investigated. Both studies assessed the difference between the pre- and post-remediation BPb levels under each methodology in regression coefficients in terms of change in IQ points as a result in elevation of the BPb level from 10 to 20 ug/dl. Some of the studies used a linear model while the others used a log-linear regression model. Schwartz’s analysis came up with an average slope of (-2.57), while Pocock’s showed a difference between the pre- and post-remediation BPb levels under each methodology in recording two slopes, one for five cohort studies in his meta-analysis (-1.85 ), and one for 14 cross sectional studies (-2.35). The results presented by Schwartz (-2.57) are the most commonly applied assuming a linear relationship between the BPb level and IQ points lost. This slope is applied by the WHO in their “Environmental Burden of Disease Series” as well as by the USEPA in “The Benefits and Costs of the Clean Air Act-1970-1990”. However, it is largely agreed that the relationship between IQ and BPb level is mostly non- linear. Within the Schwartz pool of studies, it is evident from the analysis that the slope is greater between 5 ug/dl and 15 ug/dl. Schwartz noted that the group of studies with BPb levels < 15 ug/dl, recorded a higher slope (-3.23) compared to the group of studies with BPb levels > 15 ug/dl which had a slope of (-2.32) (Gross et al, 2002). These studies still favored the use of a linear relationship on the basis that there is not enough evidence for a non-linear relationship. However it is worth stressing that most of these studies assessed an increase in the BPb level from 10 to 20 ug/dl only. In other studies, higher BPb levels were examined and could provide evidence on a non-linear relationship. Cost-benefit Analysis 9
  13. 13. LIFE Lead Pollution Clean-Up in Qalyoubia Millennium Science & Engineering, Inc. In 2004, the Egyptian Environmental Policy Program (EEPP), funded by USAID, conducted a Health Risk Assessment and Economic Valuation Study entitled “Benefits of Improved Health from Cleaner Air in Greater Cairo”. The study attempted to address the problem of non-linearity by establishing a dose response function between BPb levels and IQ based on a number of previous epidemiological studies conducted between 1994 and 1999. Each of these studies estimated IQ deficit corresponding to different ranges of increase in BPb levels (EEPP, 2004). The studies associated an increase in BPb levels from 10 to 20 ug/dl, to an average loss of 2 points – according to DEFRA 1998, Pocock 1994, and Tong 1996. An average decrement difference of 4 points was observed with an increase in BPb levels from 30 to 50 ug/dl, and finally a decrement difference of 5 points was associated with an increase in the BPb level from 50 to 70 ug/dl according to the ATSDR. The EEPP study, undertook a regression analysis using the available results and accordingly established an algorithm which best fits this relationship. The algorithm is a quadratic function and is expressed as follows: IQ points lost = ((-0.0014BPb2) + 0.1661BPb In another meta analysis study including seven international studies, Lanphear, et al concluded in 2005 that the loss in IQ points is higher between 2.4 and 10ug/dl (3.9 points), than between 10 and 20 ug/dl (1.9 points), and 20 and 30 ug/dl (1.1 points) as indicated in Figure 5. This conclusion implies not only that the relationship between the BPb level and IQ point loss is non- linear but also that there is no threshold where the BPb level in children would not result in a degree of neurological impairment. (Lanphear, 2005). Figure 5: Linear vs. Log Linear Model of BPb and IQ Levels Similarly another comprehensive research study reexamined the dose response function. Data used in this analysis was based on seven out of the eight studies which previously analyzed the dose response function. Seven of the study publishers (Baghurst et al 1992; Bellinger et al 1992, Canfield et al 2003, Dietrich el al 1993, Ernhart et al.1998; Schnass et al 2000, and Wasserman et al 1997), agreed to take part in a pooled analysis to combine the data set in order to produce a larger sample for analysis (Rothenberg, 2005). This study statistically experimented with different functions of the relationship between BPb levels and lead in an effort to examine the best fit of the pooled analysis data. The different functions examined are summarized in Table 4. Cost-benefit Analysis 10
  14. 14. LIFE Lead Pollution Clean-Up in Qalyoubia Millennium Science & Engineering, Inc. Table 4: Lead Coefficients for IQ Function Variable Coefficient Linear lead model -0.18 Natural log lead model -2.7 Quadratic lead model 0.005 Quadratic log lead model -0.25 ln(lead) with linear lead prediction -2.47 The results of the study reinforced the hypothesis that the best fit relationship between BPb level and IQ level is a log-linear one as shown in Figure 6 (Rothenberg, 2005). The study also supported the assumption that most of the damage to the IQ is done with a BPb level under 10 ug/dl and a threshold of zero impact of lead on IQ is probably reached at higher levels of lead – when it starts affecting the organs, rather than at lower levels. (Rothenberg, 2005). From the above analysis it is evident that most of the studies support the assumption that the relationship between the elevation of BPb levels in children and decline in IQ level is non-linear. However, none of the studies claim that the non linear function adopted within their specific study is the "correct one". They all use the best fit of the data available from their analysis. For this study, it was decided to use the model adopted by the EEPP study in 2004 primarily because it pertains to the case of Egypt; hence applying the same model would allow a comparison between the two studies. Losses in Earnings Due to Loss of Cognitive Ability-- The relationship between the loss of cognitive ability-represented in IQ points lost, and losses in earnings was investigated by a number of scholars. A number of these studies were undertaken during the 1970s, the most popular is a study conducted by Griliches in 1977, whereby he estimated that a loss in one IQ point resulted in a loss of annual earnings ranging between 0.2 and 0.75 percent (USEPA, Appendix G: Lead Benefits Analysis, 1999). The results of this study are largely adopted among scholars investigating the relationship between loss in cognitive ability and loss in earnings, including the USEPA. In 2002, Gross et al, undertook a meta analysis of previous studies to derive a factor that quantifies the loss of IQ on earnings over a lifetime, taking into consideration both the direct impact on cognitive ability on earnings and the indirect impact on schooling and employment. The study came up with a lower bound of 1.76 percent and a higher bound of 2.37 percent. The upper bound was obtained from the results of a study conducted by DS Salvaker and published in 1995 titled “Updated Estimates of Earnings Benefits from Reduced Exposure of Children to Environmental Lead”, while the lower bound was the estimate of a study conducted by Schwartz in 1994 titled, “Societal Benefits of Reducing Lead Exposure” (Gross et al, 2002). In 2004, the study conducted by the EEPP, “Benefits of Improved Health from Cleaner Air in Greater Cairo”, used the methodology presented by Gross et al on a set of other studies cited by the USEPA. Based on this analysis, the study came up with a lower bound of 0.5 percent loss and an upper bound of 0.7 percent loss of lifetimes earnings associated with a one point IQ Cost-benefit Analysis 11
  15. 15. LIFE Lead Pollution Clean-Up in Qalyoubia Millennium Science & Engineering, Inc. loss (EEPP, 2004). A mean of 0.6 percent was established for this relationship. This result is applied in this analysis to estimate the loss of earnings using the following equation: One Point of IQ loss = 0.6% loss in earnings over a lifetime Losses in Earnings in the Study Area from One point of IQ Loss-- In order to estimate losses in earnings in the study area from one point of IQ loss over the expected life earning period of an affected child, it is important to apply the present value approach. The present value of lost earnings represents the value of a stream of lost earnings over future years in a base or reference year using a discount rate. The intention is to reflect the tradeoff between the values of an Egyptian Pound (LE) received today versus one received next year and to capture the individual’s preference for present income versus future income (Kirschstein, 2000). The discount rate used in this study is the Social Opportunity Cost of Capital in Egypt, i.e., Social Discount Rate (SDR) and is calculated based on the following basis: • Long-run interest rate at which Egypt borrows from international financial institutions. It is estimated at 7% per annum (i.e., interest rate on a bond issued by the Government of Egypt in US$). • Beta in Egypt. It reflects country risk on investment in Egypt. It is roughly estimated at 1.25 (i.e., risk in Egypt is 25% higher than developed countries (Makary, 2004)). Social Discount Rate is therefore estimated as follows; SDR = International Interest rate * Beta = 7% * (1.25) = 8.75 at nominal prices including inflation or 6% at constant prices excluding inflation. The losses in earnings in the study area were estimated using the following formula: PVL = (y * m) + (y * m) + (y * m) + + (y *m) n-1 (1+s) (1+s)2 (1+s) n-1 Where: PVL = Present value of losses of per capita earnings over the expected life of the individual y = Per capita income in the base year m = Losses in per capita income for each IQ point n = 42 years (life earning period) S = Social Discount Rate Cost-benefit Analysis 12
  16. 16. LIFE Lead Pollution Clean-Up in Qalyoubia Millennium Science & Engineering, Inc. The above calculation of PVL is based on the following assumptions: • Real Gross Domestic Product (GDP) per capita is used to reflect earnings. • Real GDP per capita in the study area was estimated at 5,009 L.E in 2001 (Qalyoubia HDR, 2003). • Real GDP increases by 5% annually. Therefore, real GDP per capita in 2003 = 5,629 LE. • Lifetime earnings are assumed over 42 years (from age 18 through 60). • One point of IQ loss = 0.6% loss in earnings over a lifetime. The present value of losses in per capita income of lifetime earnings of a worker, resulting from a loss of one point of IQ is therefore estimated at 518 LE. Losses in Earnings Per Capita at Each BPb Level (X) The present value for per capita earning losses is multiplied by the number of IQ points lost at a given BPb level using the following formula: X = PV* IQ points Lost Two BPb levels are of concern in this model in order to capture the magnitude of loss in earnings per capita. Following the results of the IEUBK model, the first one indicates the geometrical mean of the BPb level corresponding to pre-remediation levels of contamination in the soil (24 ug/dl), while the other BPb level corresponds to dropping soil concentrations to safe levels. Table 5 reflects the results at each BPb level. Table 5: PV Losses in Lifetime Earnings Per Capita at each BPb Level Mean of BPb Levels in Children IQ Points Lost at Losses in Each BPb Level Earnings per (-0.0014BPb2) + Capita ( X) at (0.1661BPb) Each BPb Level (LE) EEPP Study Pre-Remediation 12.1 ug/dl 1.79 927 Level Post-Remediation- 2 ug/dl 0.33 169 Safe Level IEUBK Model Pre-Remediation 24 ug/ dl 3.18 1,646 Level Post-Remediation- 4.741 ug/dl 0.76 391 Safe Level Total Losses in Lifetime Earnings for Each BPb Level in the Shobra ELKheima Area-- It is estimated that total population in the study area from 0 to 7 years old equals 17,020 (Projection of 2001 CAPMAS Figures). Based on this total loss in lifetime earnings at both levels are presented in table 6. Cost-benefit Analysis 13
  17. 17. LIFE Lead Pollution Clean-Up in Qalyoubia Millennium Science & Engineering, Inc. Table 6: PV of Total Losses in Lifetime Earnings at Each BPb Mean of BPb Level in Corresponding Losses in Earnings Losses in Lifetime Children Number of per Capita (X) at Earnings at Each Children Each BPb Level BPb (LE) EEPP Study Pre- 12.1 17,020 927 15,784,245 Remediation ug/dl Level Post- 2 ug/dl 17,020 169 2,877,391 Remediation Safe Level IEUBK Model Pre- 24 ug/ 17,020 1,646 28,014,920 Remediation dl Level Post 4.741 17,020 391 6,654,820 Remediation- ug/dl Safe Level Table 6 indicates that at the pre-remediation BPb levels of contamination the present value of losses in lifetime earnings under Methodology 1 is estimated at LE15,784,245. Post- remediation assumed that the BPb will decline over time to reach 2 ug/dl which is similar to the control group in Dokki. This BPb level represents a loss of lifetime earnings of LE 2,877,391. This means that total health benefits on Children’s IQ by adopting the EEPP study is estimated at 15,784,245 - 2,877,391= 12,906,854 LE. Using Methodology 2 (i.e., the IEUBK Model) at pre–remediation BPb levels, the present value of losses in lifetime earnings will be equivalent to 28,014,920 LE. After remediation, the present value of losses in lifetime earnings is estimated at 6,950,820 LE. This means that total health benefits on Children’s IQ by adopting the IEUBK Model is estimated at 28,014,920 - 6,950,820 = 21,360,100 LE Economic Burden of Cancer in the Shoubra El Kheima Area Background-- This part of the analysis aims at assigning a monetary value to the increased cancer risk in the study area as a result of soil contaminated with lead and other heavy metals, a risk avoided by the remediation work. The analysis considers other heavy metals in addition to lead due to the fact that the remediation efforts of the project will simultaneously eliminate other contaminants in the soil, reducing the total cancer risk. Studies of carcinogenicity tend to focus on identifying the slope of the linear portion of a curve of the dose versus response. The upper-bound value of the slope is called the cancer slope factor (SF). The product of the SF and the exposure dose is an estimate of the risk of developing cancer. In accordance with current scientific policy concerning carcinogens, it is assumed that Cost-benefit Analysis 14
  18. 18. LIFE Lead Pollution Clean-Up in Qalyoubia Millennium Science & Engineering, Inc. any dose, no matter how small, has some associated response (Baseline Human Health Risk Assessment Study, 2005). Chemicals are identified as known, probable, or possible human carcinogens based on a USEPA weight-of-evidence classification scheme in which chemicals are systematically evaluated for their ability to cause cancer in mammalian species and conclusions are reached about the potential to cause cancer in humans. The USEPA classification (USEPA, 1989) contains six classes based on the weight of available evidence, as follows: A Known human carcinogen. B1 Probable human carcinogen - limited evidence in humans. B2 Probable human carcinogen-sufficient evidence in animals and inadequate data in humans. C Possible human carcinogen - limited evidence in animals. D Inadequate evidence to classify. E Evidence of non-carcinogenicity. For carcinogens, risk estimates represent the incremental probability that an individual will develop cancer over a lifetime as a result of exposure to a particular carcinogen or a set of carcinogens. These risks are termed increased lifetime cancer risks and calculated using the following equation: Increased Lifetime Cancer Risk = Intake x CSF Where: Intake = Lifetime Daily Intake (mg/kg-day) CSF = Cancer Slope Factor (mg/kg-day)-1 For a given pathway, an individual may be exposed to more than one chemical. Therefore, to estimate the overall carcinogenic risk potential for each exposure pathway, risks are summed for each chemical within the pathway. The total cancer risk is estimated by summing the individual cancer risk estimates within and across pathways of exposure using the following equation: RiskT = ∑Riski Where: RiskT = the total cancer risk, expressed as a unit less probability Riski = the risk estimate for the ith substance A carcinogenic risk is expressed as a probability, such as one additional cancer in an exposed population of one million (which is also expressed as 1 x 10-6). The lifetime daily intake is the exposure dose averaged over a 70-year lifetime. This is consistent with the concept that there are no threshold doses for carcinogens (Baseline Human Health Risk Assessment Study, 2005). Cost-benefit Analysis 15
  19. 19. LIFE Lead Pollution Clean-Up in Qalyoubia Millennium Science & Engineering, Inc. The carcinogenic risk assessment in the area indicated that there are two carcinogens; lead and arsenic. The Department of Health and Human Services (DHHS), the USEPA, and the International Agency for Research on Cancer (IARC) have all determined that lead is a probable carcinogen to humans while arsenic is a known carcinogen (ATSDR, 2005). The carcinogenic risk does not identify a certain type of cancer; however, the ATSDR associates exposure to arsenic to higher risk of lung and skin cancer. Table 7, illustrates the results of the assessment. Total carcinogenic risk to children in the area is estimated at 1 x 10-3, and is due to exposure to arsenic (67%) and lead (33%) in contaminated soil and dust. In adults the risk is 2 x 10-4 and is due to exposure to arsenic (66%) and lead (34%) in contaminated soil and dust. Table 7: Carcinogenic Hazard in the Study Area Current Carcinogenic Risk Carcinogenic Risk at Clean-up Level Children 1.E-03 4E-06 Adults 2.E-04 8.E-07 Accordingly, Table 8 translates this risk into the number of probable cases of cancer in the study area related to the carcinogenic risk calculated by the Baseline Health Risk Assessment Report. Table 8: Estimated Cases of Cancer Corresponding to Pre-remediation Levels Carcinogenic Risk Population in Number of Cases the Study Area Children 1.E-03 17,020 17 Adults 2.E-04 100,000 20 As explained above, the carcinogenic risk assessment makes it possible to estimate the number of probable cancer cases in adults and children developing in the study area as a result of exposure to lead and arsenic. However the carcinogenic risk does not estimate the time of the onset of the cancer case, but only assumes it would develop at any point over a person's lifetime. This means that it does not identify the age of cancer development in each case, which is a crucial input to the economic model applied in this study. The economic model used to quantify the health consequence of cancer that will be explained in detail in the following section uses discounting to estimate the present value of the cost of a particular cancer case. This would not be possible if the age of the onset of cancer in each case is unidentified. In light of this, there was a need to develop a credible means of distributing the cancer cases -17 in children and 20 in adults, among different age groups. This task was very challenging. At the beginning of building this model, one proposal was to use the mean age of children and adults (i.e., assume that the onset of all children cases will develop at the age of 8.5 (the mean age of the 0 to17 year old age group) and all the adult cases will develop at the age of 25.5 which was selected as the appropriate age for the 18 to 69 year old age group). However, this proved to be an oversimplified approach which would underestimate the economic consequences of cancer in the area. Cost-benefit Analysis 16
  20. 20. LIFE Lead Pollution Clean-Up in Qalyoubia Millennium Science & Engineering, Inc. With Further research, a more reliable approach was identified. The International Agency for Research on Cancer (IARC), a part of the World Health Organization has developed the “GLOBOCAN Cancer Incidence, Mortality and Prevalence Worldwide”. GLOBOCAN 2000 is a software program which provides access to information on cancer worldwide. It provides country specific data, including date for Egypt on incidence, prevalence of, and mortality from 26 major cancers for all the countries in the world (WHO, 2007). According to GLOBOCAN statistics, children are grouped within one category (0 to 14 years old). There is a gap between the 14 to18 year old age group which is not available in the GLOBOCAN statistics. To overcome this gap, the analysis has hence assumed that the children category is from (0-17 years). For adults, age categories are constructed between the 18 to 44, 45 to 54, 55 to 64, and 65 to 69 age groups. GLOBOCAN estimates the incidence rate of developing cancer within each age category as a percentage of the total number of cases. In this study, these categories were used to distribute the number of cancer cases identified in the study area over different age groups. Accordingly, Tables 9 and 10 illustrate respectively the GLOBOCAN age distribution of cancer incidence in Egypt for both children and adults and the corresponding cases in the study area given the pre-remediation levels of contamination. Since children are grouped in one category in the GLOBOCN program, it was not possible to break the incidence rate in children to smaller age brackets. It was assumed that the onset of the disease for the 17 cancer cases in children will be evenly distributed (i.e., there will be an incidence rate of one cancer case of age one year old, one cancer case of age two years old, etc., through 17 years giving us a total number of 17 cases in children. GLOBOCAN provides a more specific age distribution of cancer incidence in Egypt for adults. It is assumed that 24 percent of the incidence cases occur in the age group of 18 to 44 years old, 21% between 45 and 55, 23% between 55 and 65, and 27% over 65 years of age. It is assumed that 69 years of age is the upper limit in this age group because it is the life expectancy rate in Egypt. Applying this distribution to the 20 adult cases in the study area will yield the distribution of cancer incidence displayed in Table 10. To make the analysis as accurate as possible given the use of discounting, the number of corresponding cases within each age group was distributed evenly over it instead of using a mean of the age group. For example, instead of assuming that 5 cases will develop at 31 years of age (mean of the age group 18 to 44), it was assumed that starting at 18 years old, one case will develop every five years to cover the whole range of the age group (i.e., the first case will develop at 18 years old, the second at 23 years old, etc.). Table 9: Age Distribution of Cancer Incidence in Egypt for Children and Its Application to the Shoubra El Kheima Area Age Incidence Rate Number of Distribution Group (GLOBOCAN Corresponding Cases of Cases %) in Shobra El-Kheima Children 0-17 100% 17 One every year Cost-benefit Analysis 17
  21. 21. LIFE Lead Pollution Clean-Up in Qalyoubia Millennium Science & Engineering, Inc. Table 10: Age Distribution of Cancer Incidence in Egypt for Adults and Its Application to the Shoubra El Kheima Area Age Incidence Rate Number of Distribution Group (GLOBOCAN Corresponding Cases of Cases %) in Shobra El-Kheima 18-44 24 5 One every 5 years Adults 45 -54 21 4 One every 2 years 55-64 23 5 One every 2 years 65-69 27 6 One every year Economic Model-- The Cost of Illness technique is a methodology established by Rice et al in 1985 and is used generally to evaluate the economic consequences of a particular disease. It includes two estimates; direct (medical and non-medical) and indirect costs. The direct medical cost includes all costs related to treatment such as the costs of drugs (i.e., chemotherapy, hormonal therapy, and radiation therapy), surgery, laboratory testing, physician visits, and inpatient care. Direct non-medical costs include the cost of transportation to and from healthcare facilities, and costs for lifetime accessories such as wigs. This analysis only considers direct medical costs. Indirect costs encompass patients lost earnings as a result of morbidity and or premature mortality (Reeder and Gordon, 2006, Brown et al, 2001). Direct Costs-- Direct costs are usually assessed using national or regional survey data to estimate the incidence of cancer cases and associated costs. For example in the US, data is gathered annually from “National Hospital Discharge Surveys” and “National Medical Expenditure Surveys” to estimate these figures (Chang et al, 2004). In this analysis, the incidence of cancer cases were directly related to the type and level of contamination in the Shoubra El Kheima area as calculated in the Baseline Health Risk Assessment Report. Data related to the direct cost of cancer in Egypt is difficult to acquire. The only possible way to obtain comprehensive accurate data is through undertaking a proper survey of public and private hospital records and surveying a sample of private clinics and pharmacies. This exercise is out of the scope of this analysis. An alternative approach was used to estimate the direct medical costs. This approach depends on using data from a published study on costs of seven types of cancer in the US in the year 2000. Costs are then adjusted to the Egyptian figures using an exchange rate and purchasing power parity and verified based on a series of interviews with Egyptian oncologist who could provide cost estimations based on their working experience in Egypt. Table 11, shows the overall costs of cancer in the US for seven types of Cancer in 2000 (Chang et al, 2004). Cost-benefit Analysis 18
  22. 22. LIFE Lead Pollution Clean-Up in Qalyoubia Millennium Science & Engineering, Inc. Table 11: Regression-Adjusted Mean Total Direct Medical Costs in the Study Population Patient No. of Total Cost per Month (US $) Total Costs per Study Cohort Patients Period (US $) Mean SD Mean SD Cancer 12,701 3,905 2,647 32,629 17,611 Controls 38,127 329 446 3,218 5,485 Incremental 3,576 1,293 29,411 10,003 cost Brain Cancer 652 6,364 4,423 49,242 23,729 Controls 1,959 277 426 2,790 4,555 Incremental 6,087 2,243 46,452 12,492 cost Colorectal Cancer 2,858 4,067 2,192 34,155 14,997 Controls 8,580 325 353 3,216 4,252 Incremental 3,742 1,140 30,939 8,352 cost Lung Cancer 2,038 6,520 4,511 45,897 31,099 Controls 6,120 339 376 2,907 4,056 Incremental 6,181 2,277 42,990 15,934 cost Ovarian Cancer 440 6,373 5,323 54,828 34,938 Controls 1,320 281 303 2,849 2,991 Incremental 6,092 2,587 51,979 17,650 cost Pancreatic Cancer 409 7,616 6,572 42,890 30,883 Controls 1,236 334 462 2,657 5,952 Incremental 7,282 3,300 40,233 16,180 cost Prostate Cancer 5,250 2,187 859 21,468 9,516 Controls 15,750 343 524 3,500 5,615 Incremental 1,844 625 17,968 6,803 cost NHL, aggressive Cancer 356 5,873 2,821 53,537 28,281 Controls 1,068 355 427 3,324 6,019 Incremental 5,518 1,461 50,213 14,128 cost Cost-benefit Analysis 19
  23. 23. LIFE Lead Pollution Clean-Up in Qalyoubia Millennium Science & Engineering, Inc. Patient No. of Total Cost per Month (US $) Total Costs per Study Cohort Patients Period (US $) Mean SD Mean SD NHL, indolent Cancer 698 3,878 3,236 31,839 17,618 Controls 2,094 289 331 3,013 5,305 Incremental 3,589 1,644 28,826 9,933 cost Abbreviations: SD, standard deviation; NHL, non-Hodgkin's lymphoma; CCI, Charlson Morbidity Index. Based on Table 11, the average annual cost for treating cancer was estimated at US $32,629 in 2000. A number of assumptions were undertaken to adjust this figure to the Egyptian context: • Average Annual Direct Cost/Case (2000 values) in the US= US $32,629 • Inflation rate in the US to adjust cost to 2003 values = 2.5% • Average Annual Direct Cost/Case (2003 values) = US $34,465 • Exchange Rate (2003 values) LE 1 = US $ 5.8 • Purchasing Power Parity = 1/3 of Exchange Rate (World Bank, 2002). • Numbers of Years of Treatment = 5 years (1 year of treatment, 4 years of follow up- assumed by the WHO). • Life Expectancy Rate in Egypt = 69 years • Cost of chemotherapy and radiotherapy in addition to other drugs and medical appliances contributes to 40% of total treatment cost. According to two studies conducted by the Public Health Agency of Canada on cost of cancers in the years 1990 through1995 and 2002, chemotherapy and radiotherapy contributed to an average of 20% of total cost of treatment, and another 20% was assumed for medical appliances, and other drugs used during the course of the treatment. The average cost in the US$ was converted to the Egyptian context using the above assumptions. Since Egypt imports chemotherapy medication and other medical appliances used in the course of the treatment (i.e., they are not produced locally) 40% of the cost of treatment was converted to the Egyptian context using the prevailing market exchange rate in 2003. The remaining 60% of the cost which reflects, surgery and hospital stays was converted to the Egyptian context using the purchasing power parity (PPP) of Egypt compared to the US. The purchasing power parity theory is based on the realm that long run equilibrium exchange rate of the two countries is the rate at which the purchasing powers of the two countries are equal. Cost-benefit Analysis 20
  24. 24. LIFE Lead Pollution Clean-Up in Qalyoubia Millennium Science & Engineering, Inc. This means that the purchasing power exchange rate equalizes the purchasing powers of different currencies for a given basket of goods and it gives a more accurate reflection of the standard of living prevailing in one country versus the other (i.e., how much an individual would pay to acquire similar goods or service in two different countries. For Egypt, the PPP compared to the US is estimated at 1/3 of the exchange rate (Economist, 2006, University of British Columbia, 2006, Wikipedia, 2006, World Bank, 2002). In the case of the cost of cancer treatment, the costs of surgery and hospital stays in Egypt are converted using the PPP to reflect the difference in the standard of living between the two countries since these services are provided using local factors of production in both countries. Based on the above assumption the average cost for the first year of treatment is estimated at approximately at LE 120,000. These costs were further verified through interviews with Egyptian oncologists who provided different estimates of the direct cost of treatment of cancer in Egypt. Interviews estimated that on average the cost of a cancer case would vary significantly based on the type of cancer, the protocol of treatment needed, and the venue of treatment (public versus private hospital). From the interviews it was concluded that on average a case of cancer would range anywhere from LE 50,000, in Stage I cases which do not require any surgery or hospital stays and to in excess of LE 100,000 for more advanced cases. It is worth mentioning that these costs did not typically include the cost of hospital stays which(contribute to more than 50% of the costs and were all based on personal perceptions of Egyptian oncologists working in this field (Dr. Rabab Gafaar and Dr. Hesham Nasr, National Cancer Institute). The above estimated cost reflects the cost of treatment for the first year. The cost of follow up treatment for subsequent years were estimated based on the findings of two studies conducted by the Public Health Agency of Canada, which show that the cost drops dramatically between 27% to almost 90% over the course of the follow up treatment years (Maroun et al, 2003, Luo et al, 2002). These figures as reflected in Table 12 were used to estimate the direct cost of treatment and follow up for cancer patients in Egypt past the first year of treatment. Table 12: Direct Cost of Treatment for Cancer Patients in Egypt Treatment Cost (LE) Years 1 2 3 4 5 120,000 32,379 15,542 11,656 10,491 Indirect Costs-- The indirect costs due to cancer are related to the lost productivity of workers as a result of morbidity (illness) or premature death (mortality). Two approaches are typically used to assess lost productivity, the first is the human capital approach, and the second is the willingness to pay approach (Reeder and Gordon, 2006, Brown et al, 2001). The human capital approach is based on estimating the value of income lost as a result of decreased productivity. For example, Chang et al, estimate higher absenteeism rates and short-term disability days among cancer patients. In addition, caregivers, usually other family Cost-benefit Analysis 21
  25. 25. LIFE Lead Pollution Clean-Up in Qalyoubia Millennium Science & Engineering, Inc. members also report higher rates of absenteeism from work and family deductibles – the portion of the insurance medical cost born by the patient. The willingness to pay approach on the other hand, estimates productivity loss, not only based on lost income but also based on the value a patient places on their health, or in other words, what they are willing to pay to avoid illness and its consequences (Reeder and Gordon, 2006). In this analysis, the human capital approach was used. The methodology used to estimate the cost of cancer treatment in the US in 2000 was followed since there is no access to similar local studies. Assumptions used for calculating morbidity costs were based on the following: • US study estimates of Monthly Morbidity cost as income loss equivalent to 7 working days of Absenteeism and Short Term Disability. • Total Annual Morbidity/Case = 7days/months or 84 working days. • GDP per capita in Shoubra El Kheima (2003 values) = 5,630 LE. • Total Annual Loss per case based on (300 working days). • Numbers of Years of Disability = 5 Years. • Based on these calculations, the cost of morbidity per cancer case per year is estimated at 1,576 LE (Number of working days lost/Total working days*GDP Per Capita). • Life time earnings are assumed over 42 years (i.e., ages 18 through 60). The other part of the indirect costs is this related to mortality or premature death resulting from cancer. Fatality Rate of a disease reflects mortality expected in a number of incidences of a particular disease. Incidence reflects the number of new case arising in a given period in a specific population, while mortality reflects the number of deaths occurring in a given population over a given period of time. Figure 6, reflects the GLOBOCAN WHO estimates of the fatality rate of cancer cases in Egypt. According to statistics, 80% of cancer cases in Egypt are fatal. Mortality is assumed after the initial five years of treatment. The loss of income as a result of mortality from cancer cases is calculated based on the following assumptions: • Fatality Rate: Mortality /Incidence *100 • GLOBOCAN 2000 (WHO statistics) estimates the Fatality Rate in Egypt at 80% for adults. • Mortality is assumed after the initial 5 years of treatment. • Annual GDP Per Capita = 5630 LE • Life Expectancy Rate in Egypt = 69 years of age Cost-benefit Analysis 22
  26. 26. LIFE Lead Pollution Clean-Up in Qalyoubia Millennium Science & Engineering, Inc. Figure 6: Mortality and Incidence Rates in Egypt (WHO) - 2002 Present Value of Direct and Indirect Costs-- Both direct and indirect costs of cancer are discounted using the discount rate adopted in this analysis and applied earlier to acquire the present value of lost earnings resulting from the impact of lead on the neurological system of children in the Shoubra El Kheima area. The Social Discount Rate (SDR) = 8.75 at nominal prices including inflation and 6% at constant prices excluding inflation. Based on this calculation, the total discounted direct and indirect Cost-benefit Analysis 23
  27. 27. LIFE Lead Pollution Clean-Up in Qalyoubia Millennium Science & Engineering, Inc. costs of cancer for 17 cases in children and 20 cases in adults in the Shoubra El Kheima area accounts for 3.34 million LE. CONCLUSIONS The remediation of contaminated sites is warranted based on the IQ and health benefits calculated divided by the cost of remediation. The five secondary lead smelters and the El Shahid Ahmed Shaalan School were remediated for a cost of LE 7 million. The remediation cost is based on the cost for actual remediation if the remediation was conducted using local Egyptian resources and does not include rehabilitation costs that are not associated with remediation. However, the actual remediation cost does include the cost of the design, tendering, and remediation oversight in addition to the remediation construction activities. The total IQ benefits from the remediation and the reduction in lead contamination in Shoubra El Kheima ranges between LE 12.9 and 21.36 million depending on the methodology used to estimate neurological impairment in children. The benefit associated with the reduction in health care costs is equal to LE 3.34 million. Therefore, the total benefit accrued from Life-Lead remediation activities between LE 16.24 and 24.70 million. The benefits provided in this analysis are limited to IQ loss and health care costs. Other benefits such as improved quality of life, increased property values, and other non-carcinogenic health effects are not included in the benefits remediation because they cannot be readily or accurately identified. Based on the cost of remediation, LE 7 million, and the benefit range of LE 16.24 to 24.70 million, there is a cost benefit to the Government of Egypt ranging between LE 9.24 and 17.7 million. This benefit warrants future remediation of contaminated industrial sites that impact the community. Cost-benefit Analysis 24
  28. 28. LIFE Lead Pollution Clean-Up in Qalyoubia Millennium Science & Engineering, Inc. BIBLIOGRAPHY Agency for Toxic Substances and Disease Registry (ATSDR), 2005. Agency for Toxic Substances and Disease Registry (ATSDR), 1999. Brown, Martin et al. “The Burden of Illness of Cancer: Economic Cost and Quality of Life”. Annual Review of Public Health. Vol. 22, 2001. CANCERMedical Statistical Information System. International Agency for Research on Cancer. Accessed on 12 July 2006. Available from http://www.depiarc.fr. Chang, Stella et al. “Estimating the Cost of Cancer: Results on the Basis of Claims Data Analysis for Cancer Patients Diagnosed with Seven Different Types of Cancer During 1999- 2000” Journal of Clinical Oncology: Vol. 22, No. 17, September 2004. Comprehensive Cancer Control Program. “The Cost of Cancer in Texas”. December 2001, 2nd edition. Dr. Rabab Gafaar, National Cancer Institute, Interview, April 2006. Dr. Hesham Nasr, National Cancer Institute, Interview, April 2006. EEPP. “Benefits of Improved Health from Cleaner Air in Greater Cairo: Health Risk Assessment and Economic Valuation”, March 2004. Egyptian Environmental Policy Program. “Benefits of Improved Health from Cleaner Air in Greater Cairo”, 2004. Emerging Market Indicators: Big Mac Index. Economist.com.2006. Accessed on 18 July 2006. Available from http://www.economist.com. Grosse, Scott D, et al. “Economic Gains Resulting from the Reduction in Children’s Exposure to Lead in the United States”. Environmental Health Perspective, Vol. 110, No. 6, June 2002. Kooti, John and Szmedra, Phillip. “The Cost of Cancer in Southwest Georgia” - 2001” Southern Business Review. Vol.29, No.1, 2003. Lanphear, Bruce et al. “Low – Level Environmental Lead Exposure and Children’s Intellectual Function: An International Pooled Analysis”. Environmental Health Perspectives. Vol.113, No.7 July 2005. LIFE Lead Project. Baseline Human Health Risk Assessment Study, 2005. Luo, Wel et al. “The Medical Cost of Childhood and Adolescent Cancer in Manitoba, 1990 - 1995”. Public Health Agency of Canada: Volume 23, No.3, 2002. Cost-benefit Analysis 25
  29. 29. LIFE Lead Pollution Clean-Up in Qalyoubia Millennium Science & Engineering, Inc. Maroun, Jean, et al. “Lifetime Costs of Colon and Rectal Cancer Management in Canada”. Public Health Agency of Canada: Vol. 24, No.4, 2003. Reeder, Claiborne et al. “Managing Oncology Costs”. The American Journal of Managed Care. Vol.12, No. 1, Sup, 2006. Rothenberg, Stephen et al. “Testing the Dose- Response Specification in Epidemiology: Public Health and Policy Consequences for Lead”. Environmental Health Perspectives. Vol.113, No.9, September 2005. The World Bank. “2004 World Development Indicators”. Accessed on 1st of July 2006. Available from http://siteresources.worldbank.org/ICRNT/resources/tables 5.7 PDF. The World Fact book- United States, 2006. Accessed on 24 June 2006. Available from http://www.cia.gov. The World Health Organization. GLOBOCAN 2002: Cancer Incidence, Mortality and Prevalence Worldwide, 2002. The World Health Organization. “Assessing the Environmental Burden of Disease a National and Local Levels”. Environmental Burden of Disease Series, No.2, 2003. UNDP. Human Development Report, Qalyoubia, 2003. USEPA. The Integrated Exposure Uptake Biokinetic Model (IEUBK) for Lead, 2002. USEPA. “The Benefits and Costs of the Clean Air Act, 1970 to 1990: Appendix G: Lead Benefits Analysis, 1997. . Yabroff, K. Robin, et al. “Burden of Illness in Cancer Survivors: Findings from a population – Based National Sample”. Journal of the National Cancer Institute. Vol. 96, No 17, September 2004. Cost-benefit Analysis 26

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